Barclays Plc employees were recorded talking about going behind a client’s back to make a competing bid for a takeover target, according to phone transcripts being used as evidence in a lawsuit against the lender.
CF Partners (U.K.) LLP is suing Barclays in London over the bank’s $173 million takeover of carbon-trading firm Tricorona AB in 2010. CF Partners claims it hired the bank two years earlier to work on a bid for Tricorona and Barclays then used confidential information to make its own offer.
Transcripts of phone calls read out by CF Partners’ lawyer Tim Lord indicate Barclays’ employees discussed buying Tricorona as early as 2009, while urging caution because of an exclusivity agreement with CF Partners.
“We could buy it,” one employee said in a call to another. “We’ve done all the work.”
“Let’s not get ourselves in legal trouble,” the same employee said in another call read out in court. “I wouldn’t put anything down in writing” and even calls can be taped.
Aurelie Leonard, a Barclays spokeswoman, said the case is without merit and the bank will fight the claim.
“Barclays never had an advisory relationship with CF Partners,” Leonard said in an e-mailed statement. “Barclays has traded carbon since 2004 and is one of the world’s largest emissions traders” and, as a result, “already had a relationship with Tricorona before it had any involvement with CF Partners.”
Lord, who is seeking more information including additional call transcripts to prepare a case, said at a court hearing yesterday the Barclays workers were discussing “whether they can get themselves out of the legal restrictions that prevent them from doing this deal.”
The context of the recorded calls and validity of the transcripts won’t be determined until a trial.
Barclays has tried to cooperate with evidence gathering ahead of the trial, the bank’s lawyer Ewan McQuater told the court. It has not “been guilty of persistent or widespread failures” to hand over evidence, he said.
CF Partners, a London-based trading firm focusing on renewable energy, commodities and power markets, wants damages of least 82.4 million euros ($111.5 million), according to court papers describing its claim. It is also suing Tricorona for breach of confidence.
Barclays Chief Executive Officer Antony Jenkins has given up his bonus for 2012 and promised to reform the bank’s culture after revelations that traders tried to rig interest rates for profit led to the departure of his predecessor Robert Diamond and a 290 million-pound ($456 million) regulatory fine.
Barclays was initially approached for advice on financing, before taking on other advisory roles, CF Partners said in the documents.
CF Partners’ spokesman Kevin Smith declined to comment.